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2021 is the strongest mortgage lending year since 2007

This year is set to be the strongest year for mortgage activity since 2007, according to a trade association, following a stamp duty holiday and a wave of house moves from the cities.

There is an estimated £316 billion in home loans this year, UK Finance said – an increase of almost a third (31%) compared to 2020.

This is considered the highest total since total lending reached £357 billion in 2007.

Buying a home is the main driver of lending in 2021, while homeowner remortgage activity has fallen slightly from last year, UK Finance speak.

It also predicts that lending activity will drop to £281 billion by 2022, before rising to £313 billion by 2023.



While risks remain, for both new lending and ongoing affordability, the market appears to be emerging from the pandemic in a better place than previously anticipated.

James Tatch, UK Finance

The housing market is certain to soften in 2022 compared to this year, UK Finance said, driven by demand from the stamp duty holiday, which ends in England and Northern Ireland in October, there will be no more push to buy a home.

However, other behavioral changes triggered by Covid-19, most notably a resurgence in home mobility after a decade of stagnation, are likely to provide some continued momentum, it added.

Flexible working is now embedded in many businesses’ long-term policies, meaning that daily commute is less of a consideration for many movers.

They can now look at different locations where their money can go further.

Refinancing activity is expected to pick up slightly next year and accelerate somewhat in 2023.

The number of higher fixed-rate mortgage deals, including five-year deals made in 2017, will close and loans will be eligible for refinancing.

Total home purchases, including cash purchases, will hit 1.5 million in 2021, UK Finance says, around 47 per cent higher than in 2020 and the highest figure since before the crisis global finance.

James Tatch, principal, data and research at UK Finance, said: “2021 is a record year for mortgage activity amid the tax holidays and homework assignments. move from cities.

“The outlook for the housing and mortgage markets over the next two years is a return to a more balanced and stable picture following the volatility of the past two years.

“While risks remain, for both new lending and ongoing affordability, the market appears to be emerging from the pandemic in a better place than previously anticipated, aided by The broader economic outlook has greatly improved.”

UK Finance said the coronavirus pandemic added uncertainty to its forecasts – and the picture of unemployment after the end of the furlough scheme was not entirely clear.

Rising inflation will weigh on real earnings next year and the possibility of a Bank of England rate hike over the next two years could also weigh on affordability, despite the magnitude of the increase. of any increase is likely to be relatively modest, UK Finance said.

https://www.independent.co.uk/money/2021-is-strongest-year-for-mortgage-lending-since-2007-b1974733.html 2021 is the strongest mortgage lending year since 2007

Bobby Allyn

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